Deputy Commissioner of Taxation v Kele Hire & Sales Pty Ltd [2008] NSWSC 12

Reported Decision : 69 ATR 254

New South Wales Supreme Court

CITATION : Deputy Commissioner of Taxation v Kele Hire & Sales Pty Ltd [2008] NSWSC 12

HEARING DATE(S) : 21 January 2008

JUDGMENT DATE : 21 January 2008

JURISDICTION : Equity

JUDGMENT OF : Campbell JA

EX TEMPORE JUDGMENT DATE : 21 January 2008

DECISION : Matter adjourned. Summons extended.

CATCHWORDS : CORPORATIONS - winding up - application to restrain winding up - Goods and Services Tax assessment - Income Tax assessment - appeals to Federal Court pending - whether appeals can be fairly argued

CASES CITED : Neutral Bay Pty Limited v Deputy Commissioner of Taxation [2007] QCA 312 Re Norper Investments Pty Limited and The Companies Act (1977) 77 ATC 4212; (1977) 15 ALR 603; (1977) 33 FLR 87; (1977) 2 ACLR 453; (1977) 7 ATR 488; (1977-78) CLC 40 335

PARTIES : Deputy Commissioner of Taxation - Plaintiff Kele Hire & Sales Pty Ltd - Defendant

FILE NUMBER(S) : SC 3514/07

A Smith, solicitor - Plaintiff COUNSEL : I Young - Defendant N Sullivan, solicitor - Supporting Creditor N Craven, solicitor - Supporting Creditor

Australian Taxation Office Legal Services Branch - Plaintiff SOLICITORS : Birbas Attorneys - Defendant Francis Commercial Lawyers - Supporting Creditor McLachlan Chilton - Supporting Creditor

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION DUTY JUDGE LIST

CAMPBELL JA

MONDAY 21 JANUARY 2008

3514/07 DEPUTY COMMISSIONER OF TAXATION v KELE HIRE AND SALES PTY LTD JUDGMENT – Ex Tempore 1 HIS HONOUR: The matter before the Court today is an interlocutory process in proceedings where the Deputy Commissioner of Taxation seeks to wind up the defendant. Today's application seeks to restrain the plaintiff from winding up the defendant, and various consequential or supplementary orders. 2 It arises in an unusual situation. The defendant was audited by the Commissioner last year, resulting in there being some assessments of GST issued that were supplementary to those that had been already paid. There has, after some delay, now come to be an appeal to the Federal Court against the Commissioner's denial of objections to those GST assessments, and also an appeal to the Federal Court concerning the 2001 Income Tax Return of the defendant. The last of those appeals was lodged only on Friday of last week. 3 While this matter was commenced on 12 July 2007, it was commenced by an entity other than the Deputy Commissioner. The Deputy Commissioner came to be substituted by order made on 8 October 2007. 4 I sought to ascertain from the legal representatives here today the attitude that they have to certain factual matters relevant to the case. The representative of the Commissioner was not able to tell me the Commissioner's view about whether the appeals to the Federal Court are ones that are reasonably arguable. Given the comparative lateness with which at least one of the appeals was lodged, that is not a basis on which I criticise the Commissioner. Nonetheless whether the appeals are ones which can be fairly argued is a matter that can be relevant to how the Court should approach a matter like the present: Re Norper Investments Pty Limited and The Companies Act (1977) 77 ATC 4212 at 4216; (1977) 15 ALR 603 at 607-608; (1977) 33 FLR 87 at 92-93; (1977) 2 ACLR 453 at 456-457; (1977) 7 ATR 488; (1977-78) CLC 40-335; Neutral Bay Pty Limited v Deputy Commissioner of Taxation [2007] QCA 312 at [8], [11]; (2007) 25 ACLC 1341 at 1343, 1345. 5 The matter is one which involves some complexity, both of fact and law. The defendant seeks to have the opportunity of also putting on some evidence to demonstrate solvency. 6 Given the length of time that the matter has been on foot, and that there is no immediate urgency about it, I am not persuaded that this is a matter that warrants a hearing in the vacation. 7 It was necessary for the matter to come back before the Court today, because on 17 December 2007, the originating process was extended only until today. 8 I am satisfied that there are special circumstances that justify a further extension of the originating process, arising from the fact that the matter has now been brought back in vacation, there is no immediate urgency about it, and there are matters that are relevant to the running of the application that are not clear or in a position where they can properly be put before the Court today. Under these circumstances I make the following orders: